Company Quick10K Filing
Hamilton Beach Brands Holding
Price15.70 EPS-0
Shares14 P/E-93
MCap215 P/FCF-6
Net Debt-2 EBIT1
TEV214 TEV/EBIT153
TTM 2019-09-30, in MM, except price, ratios
10-Q 2020-06-30 Filed 2020-08-05
10-Q 2020-03-31 Filed 2020-07-24
10-K 2019-12-31 Filed 2020-02-26
10-Q 2019-09-30 Filed 2019-11-07
10-Q 2019-06-30 Filed 2019-07-31
10-Q 2019-03-31 Filed 2019-04-25
10-K 2018-12-31 Filed 2019-03-06
10-Q 2018-09-30 Filed 2018-10-30
10-Q 2018-08-01 Filed 2018-08-01
10-Q 2018-05-02 Filed 2018-05-02
10-K 2017-12-31 Filed 2018-03-07
10-Q 2017-09-30 Filed 2017-11-01
8-K 2020-08-05 Earnings, Exhibits
8-K 2020-07-23 Earnings, Exhibits
8-K 2020-07-23 Amendment
8-K 2020-06-11
8-K 2020-05-22
8-K 2020-05-14
8-K 2020-05-11
8-K 2020-02-26
8-K 2020-02-26
8-K 2020-02-14
8-K 2019-11-06
8-K 2019-11-06
8-K 2019-10-25
8-K 2019-10-15
8-K 2019-07-31
8-K 2019-07-31
8-K 2019-05-09
8-K 2019-04-25
8-K 2019-04-25
8-K 2019-03-21
8-K 2019-03-06
8-K 2019-03-06
8-K 2018-12-28
8-K 2018-10-30
8-K 2018-10-30
8-K 2018-10-16
8-K 2018-08-16
8-K 2018-08-01
8-K 2018-08-01
8-K 2018-05-18
8-K 2018-05-02
8-K 2018-05-02
8-K 2018-04-16
8-K 2018-03-26
8-K 2018-03-07
8-K 2018-03-07

HBB 10Q Quarterly Report

Part I
Item 1. Financial Statements
Note 1 - Basis of Presentation and Recently Issued Accounting Standards
Note 2 - Restatement of Previously Issued Financial Statements
Note 4 - Transfer of Financial Assets
Note 5 - Fair Value Disclosure
Note 6 - Stockholders' Equity
Note 7 - Revenue
Note 8 - Contingencies
Item 2. - Management's Discussion and Analysis of Financial Condition and Results of Operations
Item 3. Quantitative and Qualitative Disclosures About Market Risk
Item 4. Controls and Procedures
Part II
Item 1 Legal Proceedings
Item 1A Risk Factors
Item 2 Unregistered Sales of Equity Securities and Use of Proceeds
Item 3 Defaults Upon Senior Securities
Item 4 Mine Safety Disclosures
Item 5 Other Information
Item 6 Exhibits
EX-31.1 a31i1certifications-gt.htm
EX-31.2 a31i2certifications-mm.htm
EX-32 a32certificationpursua.htm

Hamilton Beach Brands Holding Earnings 2020-06-30

Balance SheetIncome StatementCash Flow
3803042281527602017201820192020
Assets, Equity
27021516110652-12017201820192020
Rev, G Profit, Net Income
50298-13-34-552017201820192020
Ops, Inv, Fin

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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
 _______________________________________________________________________________________________________________________________________________________________________________________________________
FORM 10-Q
(Mark One)
 
 
 
 
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 
 
For the quarterly period ended
June 30, 2020
or
 
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 
 
For the transition period from                      to                     
Commission File Number: 001-38214
 
HAMILTON BEACH BRANDS HOLDING COMPANY
 
 
 
(Exact name of registrant as specified in its charter)
 
 
 
 
 
 
 
 
 
Delaware
 
 
31-1236686
 
 
(State or other jurisdiction of incorporation or organization)
 
 
(I.R.S. Employer Identification No.)
 
 
 
 
 
 
 
 
4421 WATERFRONT DR.
GLEN ALLEN
VA
23060
 
 
(Address of principal executive offices)
(Zip code)
 
 
 
 
 
 
 
 
 
(804)
273-9777
 
 
 
 
(Registrant's telephone number, including area code)
 
 
 
 
 
 
 
 
 
 
N/A
 
 
 
 
(Former name, former address and former fiscal year, if changed since last report)
 
 

Securities registered pursuant to Section 12(b) of the Act:
Title of each class
 
Trading Symbol(s)
 
Name of each exchange on which registered
Class A Common Stock, Par Value $0.01 Per Share
 
HBB
 
New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.             Yes þ NO o

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).                             Yes þ NO o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and "emerging growth company" in Rule 12b-2 of the Exchange Act.
Large accelerated filer
o
Accelerated filer
þ
Non-accelerated filer
o
 
Smaller reporting company
Emerging growth company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

YES NO þ

Number of shares of Class A Common Stock outstanding at July 31, 2020: 9,607,226
Number of shares of Class B Common Stock outstanding at July 31, 2020: 4,062,372
 
 
 
 
 



HAMILTON BEACH BRANDS HOLDING COMPANY
TABLE OF CONTENTS
 
 
 
 
 
Page Number
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

1


Part I
FINANCIAL INFORMATION
Item 1. Financial Statements

HAMILTON BEACH BRANDS HOLDING COMPANY
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)



As Restated

As Restated and Recast

JUNE 30
2020

DECEMBER 31
2019

JUNE 30
2019
 
(In thousands)
Assets
 


 


Current assets








Cash and cash equivalents
$
1,616


$
2,142


$
1,029

Trade receivables, net
85,209


108,381


86,268

Inventory
90,572


109,806


121,472

Prepaid expenses and other current assets
13,358


11,345


16,412

Current assets of discontinued operations


5,383


21,255

Total current assets
190,755


237,057


246,436

Property, plant and equipment, net
23,064


22,324


21,649

Goodwill
6,253


6,253


6,253

Other intangible assets, net
2,494


3,141


3,828

Deferred income taxes
5,830


6,248


3,754

Deferred costs
11,532


10,941


8,564

Other non-current assets
2,673


2,085


1,984

Non-current assets of discontinued operations


614


4,420

Total assets
$
242,601


$
288,663


$
296,888

Liabilities and stockholders' equity
 


 




Current liabilities





Accounts payable
$
92,282


$
111,348


$
86,199

Accounts payable to NACCO Industries, Inc.
496


496


220

Revolving credit agreements
41,785


23,497


51,505

Accrued compensation
11,362


15,027


11,725

Accrued product returns
7,383


8,697


8,224

Other current liabilities
15,242


12,534


21,382

Current liabilities of discontinued operations


29,723


20,048

Total current liabilities
168,550


201,322


199,303

Revolving credit agreements


35,000


30,000

Other long-term liabilities
12,499


16,075


14,699

Non-current liabilities of discontinued operations




3,697

Total liabilities
181,049


252,397


247,699

Stockholders' equity
 


 




Class A Common stock
99


98


95

Class B Common stock
41


41


44

Capital in excess of par value
56,325


54,509


53,342

Treasury stock
(5,960
)

(5,960
)

(2,334
)
Retained earnings
30,528


3,710


15,646

Accumulated other comprehensive loss
(19,481
)

(16,132
)

(17,604
)
Total stockholders' equity
61,552


36,266


49,189

Total liabilities and stockholders' equity
$
242,601


$
288,663


$
296,888


See notes to unaudited condensed consolidated financial statements.

2


HAMILTON BEACH BRANDS HOLDING COMPANY
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)

 
THREE MONTHS ENDED
June 30,
 
SIX MONTHS ENDED
June 30,
 
 
 
As Restated and Recast
 
 
 
As Restated and Recast
 
2020
 
2019
 
2020
 
2019
 
(In thousands, except per share data)
 
(In thousands, except per share data)
Revenue
$
138,297


$
131,065


$
259,143


$
257,707

Cost of sales
103,043


102,558


198,849


202,498

Gross profit
35,254


28,507


60,294


55,209

Selling, general and administrative expenses
24,035


24,976


48,248


51,222

Amortization of intangible assets
324


346


648


691

Operating profit
10,895


3,185


11,398


3,296

Interest expense, net
366


789


969


1,452

Other expense (income), net
(193
)

(132
)

1,509


(329
)
Income (loss) from continuing operations before income taxes
10,722


2,528


8,920


2,173

Income tax expense (benefit)
2,657


630


2,209


937

Net income (loss) from continuing operations
8,065


1,898


6,711


1,236

Income (loss) from discontinued operations, net of tax
(305
)

(2,516
)

22,561


(5,239
)
Net income (loss)
$
7,760


$
(618
)

$
29,272


$
(4,003
)
 
 


 







Basic and diluted earnings (loss) per share:











Continuing operations
$
0.59


$
0.14


$
0.49


$
0.09

Discontinued operations
(0.02
)

(0.18
)

1.65


(0.38
)
Basic and diluted earnings (loss) per share
$
0.57


$
(0.04
)

$
2.14


$
(0.29
)












Basic weighted average shares outstanding
13,644


13,813


13,635


13,800

Diluted weighted average shares outstanding
13,670


13,826


13,657


13,813



See notes to unaudited condensed consolidated financial statements.

3


HAMILTON BEACH BRANDS HOLDING COMPANY
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
(Unaudited)

 
THREE MONTHS ENDED
June 30,
 
SIX MONTHS
ENDED
June 30,
 
 
 
As Restated and Recast
 
 
 
As Restated and Recast
 
2020
 
2019
 
2020
 
2019
 
(In thousands)
 
(In thousands)
Net income (loss)
$
7,760

 
$
(618
)
 
$
29,272

 
$
(4,003
)
Other comprehensive income (loss), net of tax:
 
 
 
 
 
 
 
Foreign currency translation adjustment
488

 
113

 
1,545

 
327

(Loss) gain on long-term intra-entity foreign currency transactions
31

 
121

 
(4,879
)
 
136

Cash flow hedging activity
137

 
(877
)
 
(25
)
 
(1,299
)
Reclassification of hedging activities into earnings
(392
)
 
144

 
(282
)
 
146

Reclassification of pension adjustments into earnings
97

 
102

 
292

 
186

Total other comprehensive loss, net of tax
361

 
(397
)
 
(3,349
)
 
(504
)
Comprehensive income (loss)
$
8,121

 
$
(1,015
)
 
$
25,923

 
$
(4,507
)

See notes to unaudited condensed consolidated financial statements.

4


CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
 
SIX MONTHS ENDED JUNE 30



As Restated and Recast
 
2020
 
2019
 
(In thousands)
Operating activities
 
 
 
Net income (loss) from continuing operations
$
6,711

 
$
1,236

Adjustments to reconcile net income (loss) from continuing operations to net cash used for operating activities:
 
 
 
Depreciation and amortization
1,486

 
1,841

Deferred income taxes
1,037

 
1,900

Stock compensation expense
1,817


1,629

Other
116

 
77

Net changes in operating assets and liabilities:
 
 
 
Affiliate payable


(2,195
)
Trade receivables
19,079

 
12,922

Inventory
17,222

 
1,936

Other assets
(1,462
)
 
(1,602
)
Accounts payable
(18,871
)
 
(33,102
)
Other liabilities
(5,383
)
 
(16,288
)
Net cash provided by (used for) operating activities from continuing operations
21,752

 
(31,646
)
Investing activities
 
 
 
Expenditures for property, plant and equipment
(1,592
)
 
(1,972
)
Other
(500
)


Net cash used for investing activities from continuing operations
(2,092
)
 
(1,972
)
Financing activities
 
 
 
Net additions (reductions) to revolving credit agreements
(16,692
)
 
34,852

Purchase of treasury stock


(2,334
)
Cash dividends paid
(2,454
)

(2,419
)
Net cash provided by (used for) financing activities from continuing operations
(19,146
)
 
30,099

Cash flows from discontinued operations





Net cash used for operating activities from discontinued operations
(6,193
)

(10,443
)
Net cash provided by investing activities from discontinued operations
6


(83
)
Net cash provided by financing activities from discontinued operations


9,450

Cash used for discontinued operations
(6,187
)

(1,076
)
Effect of exchange rate changes on cash, cash equivalents, and restricted cash
1,079

 
(626
)
Cash, cash equivalents and restricted cash
 
 
 
Increase (decrease) for the period from continuing operations
1,593

 
(4,145
)
Decrease for the period from discontinued operations
(6,187
)

(1,076
)
Balance at the beginning of the period
7,164

 
6,352

Balance at the end of the period
$
2,570

 
$
1,131







Reconciliation of cash, cash equivalents and restricted cash





Continuing operations:





Cash and cash equivalents
$
1,616


$
1,029

Restricted cash included in prepaid expenses and other current assets
194



Restricted cash included in other non-current assets
760



Cash and cash equivalents of discontinued operations


102

Total cash, cash equivalents, and restricted cash
$
2,570


$
1,131

See notes to unaudited condensed consolidated financial statements.

5


HAMILTON BEACH BRANDS HOLDING COMPANY
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
(Unaudited)
 
Class A Common Stock
Class B Common Stock
Capital in Excess of Par Value
Treasury Stock
Retained Earnings
Accumulated Other Comprehensive Income (Loss)
Total Stockholders' Equity
 
(In thousands, except per share data)
As Restated Balance, January 1, 2020
$
98

$
41

$
54,509

$
(5,960
)
$
3,710

$
(16,132
)
$
36,266

Net income




21,512


21,512

Issuance of common stock, net of conversions
1


(1
)




Share-based compensation expense


554




554

Cash dividends, $0.09 per share




(1,226
)

(1,226
)
Other comprehensive loss, net of tax





(4,015
)
(4,015
)
Reclassification adjustment to net income





305

305

Balance, March 31, 2020
$
99

$
41

$
55,062

$
(5,960
)
$
23,996

$
(19,842
)
$
53,396

Net income




7,760


7,760

Issuance of common stock, net of conversions







Share-based compensation expense


1,263




1,263

Cash dividends, $0.09 per share




(1,228
)

(1,228
)
Other comprehensive loss, net of tax





656

656

Reclassification adjustment to net income





(295
)
(295
)
Balance, June 30, 2020
$
99

$
41

$
56,325

$
(5,960
)
$
30,528

$
(19,481
)
$
61,552

 
 
 
 
 
 
 
 
Balance as Restated, January 1, 2019
$
93

$
44

$
51,714

$

$
22,068

$
(17,101
)
$
56,818

Net loss




(3,385
)

(3,385
)
Issuance of common stock, net of conversions
2


(1
)



1

Purchase of treasury stock







Share-based compensation expense


807




807

Cash dividends, $0.085 per share




(1,177
)

(1,177
)
Other comprehensive loss, net of tax





(192
)
(192
)
Reclassification adjustment to net loss





86

86

Balance as Restated, March 31, 2019
$
95

$
44

$
52,520

$

$
17,506

$
(17,207
)
$
52,958

Net loss




(618
)

(618
)
Issuance of common stock, net of conversions







Purchase of treasury stock



(2,334
)


(2,334
)
Share-based compensation expense


822




822

Cash dividends, $0.09 per share




(1,242
)

(1,242
)
Other comprehensive loss, net of tax





(643
)
(643
)
Reclassification adjustment to net loss





246

246

Balance as Restated, June 30, 2019
$
95

$
44

$
53,342

$
(2,334
)
$
15,646

$
(17,604
)
$
49,189



See notes to unaudited condensed consolidated financial statements.


6


HAMILTON BEACH BRANDS HOLDING COMPANY
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2020
(Tabular amounts in thousands, except as noted and per share amounts)

NOTE 1—Basis of Presentation and Recently Issued Accounting Standards

Basis of Presentation

Hamilton Beach Brands Holding Company is a holding company and operates through its wholly-owned subsidiary, Hamilton Beach Brands, Inc. (“HBB”) (collectively “Hamilton Beach Holding” or the “Company”). HBB is a leading designer, marketer, and distributor of branded, small electric household and specialty housewares appliances, as well as commercial products for restaurants, fast food chains, bars, and hotels. HBB participates in the consumer, commercial and specialty small kitchen appliance markets.

The Company previously operated through its other wholly-owned subsidiary, The Kitchen Collection, LLC ("KC"), which is reported as discontinued operations in all periods presented herein. KC completed its dissolution on April 3, 2020 with a pro-rata distribution of its remaining assets to creditors, at which time the KC legal entity ceased to exist. See Note 3 for further information on discontinued operations.

The financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial information. Accordingly, they do not include all of the information and notes required by U.S. GAAP for complete financial statements. In the opinion of management, all adjustments of a normal recurring nature considered necessary for a fair presentation have been included. These financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Company's Annual Report on Form 10-K/A for the year ended December 31, 2019.

Operating results for the six months ended June 30, 2020 are not necessarily indicative of the results that may be expected for the remainder of the year due to the highly seasonal nature of our primary markets. A majority of revenue and operating profit typically occurs in the second half of the calendar year when sales of our products to retailers and consumers historically increase significantly for the fall holiday-selling season.

HBB maintains a $115.0 million senior secured floating-rate revolving credit facility (the “HBB Facility”) that expires on June 30, 2021, within one year after the issuance of these financial statements.  Given the market conditions including unfavorable pricing terms, HBB has not yet completed its refinancing of the HBB Facility and accordingly, all amounts outstanding have been classified as current liabilities.  HBB has approved and begun the refinancing process, which is considered customary.   Based on the current status of the refinancing and HBB’s history of successfully refinancing its debt, HBB believes that it is probable that the HBB Facility will be refinanced before its maturity.  HBB believes funds available from cash on hand, the HBB Facility and operating cash flows will provide sufficient liquidity to meet its operating needs and commitments arising during the next twelve months.

Accounting Standards Not Yet Adopted

The Company is an emerging growth company and has elected not to opt out of the extended transition period for complying with new or revised accounting standards, which means that when a standard is issued or revised and it has different application dates for public or nonpublic entities, the Company can adopt the new or revised standard at the time nonpublic entities adopt the new or revised standard.

In February 2016, the FASB issued ASU 2016-02, “Leases (Topic 842)," which requires an entity to recognize assets and liabilities for the rights and obligations created by leased assets. For nonpublic entities, the amendments are currently effective for fiscal years beginning after December 15, 2021, and interim periods within fiscal years beginning after December 15, 2022. Early adoption is permitted. The Company is planning to adopt ASU 2016-02 when required and is currently evaluating to what extent ASU 2016-02 will affect the Company's financial position, results of operations, cash flows and related disclosures.


7


In June 2016, the FASB issued ASU 2016-13, “Financial Instruments - Credit Losses (Topic 326)," which requires an entity to recognize credit losses as an allowance rather than as a write-down. For nonpublic entities, the amendments are effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. Early adoption is permitted. The Company is planning to adopt ASU 2016-03 for its year ending December 31, 2023 and is currently evaluating to what extent ASU 2016-13 will affect the Company's financial position, results of operations, cash flows and related disclosures.

NOTE 2— Restatement of Previously Issued Financial Statements

During the quarter ended March 31, 2020, the Company discovered certain accounting irregularities at its Mexican subsidiaries. The Company’s Audit Review Committee commenced an internal investigation, with the assistance of outside counsel and other third party experts. As a result of this investigation, the Company, along with the Audit Review Committee and its third party experts, concluded that certain former employees of one of the Company’s Mexican subsidiaries engaged in unauthorized transactions with the Company’s Mexican subsidiaries that resulted in expenditures being deferred on the balance sheet beyond the period for which the costs pertained. As a result, the Company recorded a non-cash write-off for certain amounts included in the Company’s historical consolidated financial statements in trade receivables and prepaid expenses and other current assets, among other corrections, related to these transactions, and restated its consolidated financial statements as of December 31, 2019 and 2018, and for the years ended December 31, 2019, 2018 and 2017 and each of the quarters during the years ended December 31, 2019 and 2018 on Form 10-K/A for the year ended December 31, 2019. During the course of the investigation, certain expenses at the Company's Mexican subsidiaries were found to be incorrectly classified within the consolidated statement of operations and have also been corrected in the restatement. These misstatements are described in restatement reference (a) through (d) below.

The restatement also includes corrections for other errors previously identified as immaterial, individually and in the aggregate, to our consolidated financial statements.

Description of Misstatements

(a) Write-off of Assets: Certain former employees of one of the Company's Mexican subsidiaries engaged in unauthorized transactions with the Company’s Mexican subsidiaries and vendors in which the employees had an interest. In doing so, expenditures were deferred on the balance sheet beyond the period for which the costs pertained. The amounts were recorded as trade receivables, prepaid expenses and other current assets, and reductions in accrued liabilities. The amounts have been written off to selling, general and administrative expenses. Where these write-offs caused prepaid assets and other current assets balance to become a liability, the balance has been reclassed from prepaid expenses and other assets to other current liabilities.

(b) Reversal of Revenue: Certain former employees of one of our Mexican subsidiaries engaged in sales activities to customers in which the employees had an interest. The Company concluded that these unauthorized transactions did not meet the criteria for revenue recognition at the time of sale and the revenue has been reversed.

(c) Correction of misclassification of Selling and Marketing Expenses: Certain former employees of one of the Mexican subsidiaries engaged a third-party, in which the employees had an interest, to perform selling and marketing activities on behalf of the Mexican subsidiaries. Amounts paid for the selling and marketing activities had previously been treated as variable consideration and reflected as a reduction to revenue; however, the amounts should be reflected as selling, general and administrative expenses.

(d) Correction for the timing of recognition of customer price concessions: Customer price concessions at our Mexican subsidiaries were not accrued timely in order to obscure the increased expenses due to unauthorized transactions as described above.

(e) Tax adjustments for corrections: The tax impacts of the corrections have been recorded.

(f) Correction of other immaterial errors.


8


Restatement Tables

The restatement tables below present a reconciliation from the previously reported to the restated values as of and for the three and six months ended June 30, 2019 and as of December 31, 2019. The values as previously reported were derived from our Quarterly Report on Form 10-Q for the quarter ended June 30, 2019 filed on July 31, 2019 and from our Annual Report on Form 10-K for the fiscal year ended December 31, 2019 filed on February 26, 2020.

Additionally, in the fourth quarter of 2019, KC met the requirements to be reported as a discontinued operation. The following consolidated financial tables present a reconciliation to reflect KC as a discontinued operation for all periods presented and are labeled "Recast". See Note 3, Discontinued Operations for more information.

9


CONDENSED CONSOLIDATED BALANCE SHEETS
 
December 31, 2019
 
As Previously Reported
 
Restatement Impacts
 
Restatement Reference
 
As Restated
 
(In thousands)
Assets
 
 
 
 
 
 
 
Current assets
 
 
 

 
 
 
 
Cash and cash equivalents
$
2,142

 
$

 
 
 
$
2,142

Trade receivables, net
113,781

 
(5,400
)
 
a,b,d
 
108,381

Inventory
109,621

 
185

 
f
 
109,806

Prepaid expenses and other current assets
23,102

 
(11,757
)
 
a,b,f
 
11,345

Current assets of discontinued operations
5,383

 

 
 
 
5,383

Total current assets
254,029

 
(16,972
)
 
 
 
237,057

Property, plant and equipment, net
22,324

 

 
 
 
22,324

Goodwill
6,253

 

 
 
 
6,253

Other intangible assets, net
3,141

 

 
 
 
3,141

Deferred income taxes
3,853

 
2,395

 
e
 
6,248

Deferred costs
10,941

 

 
 
 
10,941

Other non-current assets
2,085

 

 
 
 
2,085

Non-current assets of discontinued operations
614

 

 
 
 
614

Total assets
$
303,240

 
$
(14,577
)
 
 
 
$
288,663

Liabilities and stockholders' equity
 
 
 
 
 
 
 
Current liabilities
 
 
 
 
 
 
 
Accounts payable
$
111,117

 
$
231

 
f
 
$
111,348

Accounts payable to NACCO Industries, Inc.
496

 

 
 
 
496

Revolving credit agreements
23,497

 

 
 
 
23,497

Accrued compensation
14,277

 
750

 
f
 
15,027

Accrued product returns
8,697

 

 
 
 
8,697

Other current liabilities
12,873

 
(339
)
 
a,e
 
12,534

Current liabilities of discontinued operations
29,723

 

 
 
 
29,723

Total current liabilities
200,680

 
642

 
 
 
201,322

Revolving credit agreements
35,000

 

 
 
 
35,000

Other long-term liabilities
12,501

 
3,574

 
e
 
16,075

Total liabilities
248,181

 
4,216

 
 
 
252,397

Stockholders’ equity
 
 
 
 
 
 
 
Preferred stock, par value $0.01 per share

 

 
 
 

Class A Common stock, par value $0.01 per share; 9,805 shares issued as of December 31, 2019
98

 

 
 
 
98

Class B Common stock, par value $0.01 per share, convertible into Class A on a one-for-one basis; 4,076 shares issued as of December 31, 2019
41

 

 
 
 
41

Capital in excess of par value
54,344

 
165

 
f
 
54,509

Treasury stock
(5,960
)
 

 
 
 
(5,960
)
Retained earnings
22,524

 
(18,814
)
 
a,b,d,e,f
 
3,710

Accumulated other comprehensive loss
(15,988
)
 
(144
)
 
a,b,d,e
 
(16,132
)
Total stockholders’ equity
55,059

 
(18,793
)
 
 
 
36,266

Total liabilities and stockholders' equity
$
303,240

 
$
(14,577
)
 
 
 
$
288,663



10




(a) Write-off of Assets: The correction of these misstatements resulted in a decrease to trade receivables of $2.5 million, a reduction to prepaid expenses and other current assets of $12.4 million, and an increase to other current liabilities of $0.9 million
(b) Reversal of Revenue: The correction of these misstatements resulted in a decrease to trade receivables of $1.3 million and an increase to prepaid expenses and other current assets of $0.2 million
(d) Correction for the timing of recognition of customer price concessions: The correction of these misstatements resulted in a decrease to trade receivables of $1.6 million
(e) Tax adjustments for corrections: The correction of these misstatements resulted in an increase to deferred income taxes of $2.4 million, a decrease to other current liabilities of $1.2 million, and an increase to other long-term liabilities of $3.6 million
(f) Correction of other immaterial errors: The correction of these misstatements resulted in an increase to prepaid expenses and other current assets of $0.5 million, an increase to inventory of $0.2 million, an increase to accounts payable of $0.2 million, an increase to accrued compensation of $0.7 million, and an increase to capital in excess of par of $0.2 million


11



CONDENSED CONSOLIDATED BALANCE SHEETS

12


`
June 30, 2019
 
 
 
As Previously Reported
 
Restatement Impacts
 
Restatement Reference
 
As Restated
Recasting Impacts
As Restated and Recast
 
(In thousands)
Assets
 
 
 
 
 
 
 
 
 
Current assets
 
 
 
 
 
 
 
 
 
Cash and cash equivalents
$
1,131

 
$

 
 
 
$
1,131

$
(102
)
$
1,029

Trade receivables, net
89,579

 
(2,446
)
 
a,f
 
87,133

(865
)
86,268

Inventory
140,817

 

 
 
 
140,817

(19,345
)
121,472

Prepaid expenses and other current assets
24,078

 
(6,723
)
 
a
 
17,355

(943
)
16,412

Current assets of discontinued operations